AES Defaults Again on a Brazil Payment

www.nytimes.com By BLOOMBERG NEWS

ARLINGTON, Va., March 3 (Bloomberg News) — The AES Corporation, which generates power in 32 countries, said today that a unit defaulted on a $330 million payment due a Brazilian government bank, and the lender may take AES's stake in Latin America's largest electric utility.

The bank can demand immediate payment of $605 million after refusing to extend Friday's deadline, AES said. AES also missed a $35 million payment in January. The debt is backed by the AES stake in Eletropaulo Metropolitana, São Paulo's utility.

AES, which is based in Arlington, wants the bank to restructure its Brazilian debt, saying Eletropaulo has not generated enough cash to make the payments after the decline of Brazil's currency. President Luiz Inácio Lula da Silva faces political demands that he consider reclaiming the utility, part of a sell-off of state assets that attracted investment of $150 billion in the 1990's.

The Brazil National Bank for Economic and Social Development refused to postpone the payment.